INVESTMENT PROPOSAL
4
Investment Proposal
Student Name
University
Introduction
Dr. Pepper Snapple Group, Inc. is soft drink Company based in the United States, and it focuses on the production, marketing, and supply of soft drinks. The company’s beverage products are categorized in two, the non-carbonated soft drinks and the carbonated beverages that are flavored. The company operates in three segments for it to be able to meet its customers’ demands. The departments are Soft drink Concentrates, Packaging department, and the Latin American soft drinks. The first segment, the beverage concentrates is accountable for production and sale of the carbonated beverages among other branded syrups and concentrates. The second section which is the packaging segment is responsible for production and distribution of the packaged soft drinks among other products through the direct delivery system to the retail outlets. The third portion focuses on producing and supplying syrups, concentrates and finished soft drink products. Dr. Pepper Snapple Group, Inc. holds a market share of 14.7% positioning it in the third place after Pepsi-Cola which has 35.3% of its market share (Hill, 2012). Dr. Pepper Snapple Group, Inc. has defined its briefcase efficiently through concentrating on their sales and marketing resources. The company’s marketing strategy will enable the organization to focus on the various market analyses which will allow the company to identify the impact the critical brands produced and how they could improve them to gain a more significant market share (Hoskisson, 2012).
Through the information gathered from the market, analysis sources show that the company expense will not be affected because the products that the targeted population need are not new products in the market. Also through the third-party distribution plan and the increase of the in-store activity contributes significantly to minimizing the cost of the advertisement.
The Break-Even Point
The break-even point is calculated by comparing the amount of units that have to be sold in order to cover for the fixed and variable costs. In the case of Dr. Pepper Snapple Group, Inc, the break-even point analysis will be based on the number of units that the company has to sell in order to cover for all expenses.
Break-even point in units= Fixed Costs/(Sales price per unit-variable cost per unit)
=$100,000/$75-$67
=$100,000/$8
=12,500 units
Internal Rate of Return
The internal rate of return (IRR) will be used to assess the profitability of the project undertaken by Dr. Pepper Snapple Group, Inc.
With a break-even point in units of 12,500, and a calculated volume of 12,500, the company can reach its break-even point within one period.
(NPV) 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . . . +Pn/(1+IRR)n
0=937,500+937,500(1+IRR)
0=937,500+937,500+937,500IRR
0=1,875,000+937,500IRR
937,500IRR=-1,875,000
IRR=-2%
Net Present Value
NPV=-937,500+(75*12,500) (1-2%)
=9.
1. INVESTMENT PROPOSAL
4
Investment Proposal
Student Name
University
Introduction
Dr. Pepper Snapple Group, Inc. is soft drink Company based in
the United States, and it focuses on the production, marketing,
and supply of soft drinks. The company’s beverage products are
categorized in two, the non-carbonated soft drinks and the
carbonated beverages that are flavored. The company operates
in three segments for it to be able to meet its customers’
demands. The departments are Soft drink Concentrates,
Packaging department, and the Latin American soft drinks. The
first segment, the beverage concentrates is accountable for
production and sale of the carbonated beverages among other
branded syrups and concentrates. The second section which is
the packaging segment is responsible for production and
distribution of the packaged soft drinks among other products
through the direct delivery system to the retail outlets. The third
portion focuses on producing and supplying syrups,
concentrates and finished soft drink products. Dr. Pepper
Snapple Group, Inc. holds a market share of 14.7% positioning
it in the third place after Pepsi-Cola which has 35.3% of its
market share (Hill, 2012). Dr. Pepper Snapple Group, Inc. has
defined its briefcase efficiently through concentrating on their
sales and marketing resources. The company’s marketing
strategy will enable the organization to focus on the various
2. market analyses which will allow the company to identify the
impact the critical brands produced and how they could improve
them to gain a more significant market share (Hoskisson, 2012).
Through the information gathered from the market, analysis
sources show that the company expense will not be affected
because the products that the targeted population need are not
new products in the market. Also through the third-party
distribution plan and the increase of the in-store activity
contributes significantly to minimizing the cost of the
advertisement.
The Break-Even Point
The break-even point is calculated by comparing the amount of
units that have to be sold in order to cover for the fixed and
variable costs. In the case of Dr. Pepper Snapple Group, Inc, the
break-even point analysis will be based on the number of units
that the company has to sell in order to cover for all expenses.
Break-even point in units= Fixed Costs/(Sales price per unit-
variable cost per unit)
=$100,000/$75-$67
=$100,000/$8
=12,500 units
Internal Rate of Return
The internal rate of return (IRR) will be used to assess the
profitability of the project undertaken by Dr. Pepper Snapple
Group, Inc.
3. With a break-even point in units of 12,500, and a calculated
volume of 12,500, the company can reach its break-even point
within one period.
(NPV) 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . .
. +Pn/(1+IRR)n
0=937,500+937,500(1+IRR)
0=937,500+937,500+937,500IRR
0=1,875,000+937,500IRR
937,500IRR=-1,875,000
IRR=-2%
Net Present Value
NPV=-937,500+(75*12,500) (1-2%)
=937,500+937,500(1-0.02)
=937,500+918750
=1,856,250
Conclusion
The marketing and distribution strategies allow the company to
perform tests, observations, and analyses thus enabling it to be
in a position to come up with a valid marketing plan for its
products and the ability to venture into new markets. The
company has been able to survive the competitive market of soft
drinks due to its effort of investing in promotion and
advertising. Also creating it awareness with its consumers
through the collaboration with the third-party distribution and
4. focusing on the ethnic population in America will enable the
company to increase its market share in the soft drink industry.
References
Hill, M. E. (2012). Marketing Strategy: The Thinking Involved.
London: SAGE.
Hoskisson, R. E. (2012). Strategic Management Cases:
Competitiveness and Globalization.
What factors should be considered to provide maximal
protection when people are exercising in the cold?
One of the factors to maximize the protection and strength
during an exercise is drinking water. I personally think that
there is a huge misconception that because it is cold you do not
have to drink as much water to prevent dehydration, this would
be completely false. Our bodies need the water all the time
especially during exercising to make sure that the body is
constantly hydrated regardless of the temperature. So, drinking
water would help maximize protection when performing doing
exercise no matter what temperature. Another factor would be
“Acclimatization” which refers to those physiological responses
of a deeper origin: the hormonal and metabolic programming
that governs not only your tendency to sweat, but how you
sweat, when you sweat, and even the amount of salt your sweat
carries with it. This temperature-regulation system is controlled
in large part by a collaboration between your hypothalamus and
pituitary gland, and manages a range of physiological
responses. These include the readiness with which you shunt
blood to vessels in your skin (which has a cooling effect); the
meter and sensitivity of your heartbeat; your body's overall
production of thermal energy; and the allotment of bodily
resources to protecting your liver, brain, kidneys, and other
vital organs (Gonzalez 2014). So to adjust to an extreme “cold”
temperatures is a gradual physiological process known as
acclimatization.
5. How would training at medium altitude and then competing at
altitude affect a runner’s performance? How would training at
sea level affect a runner’s performance?
The higher you go in the atmosphere, the thinner the air.
Thinner air means less air resistance, so athletes who sprint,
jump, or cycle will perform better at high-altitude venues. But
thinner air also means less oxygen, so the pace of hard
endurance training and competition--which depends on high
rates of oxygen consumption--gets slower at altitude (Baker
2008). That means, athletes should be OK to do training at
medium altitude then going to a higher altitude to compete.
They will actually be able to run faster in the higher altitudes
but there will be less oxygen in the air at the same time “win
loose situation”. As long as it is a sprint competition the athlete
would be fine, however, the long distance competition will
probably put an athlete at a disadvantage as far as training in
lower altitude and competing in higher altitude.
Training near sea level while living at an altitude of 2500 m
(8000 ft) for a month enhances subsequent endurance
performance, probably by increasing the oxygen-carrying
capacity of the blood through an increase in production of red
blood cells (Baker 2008). So that being said, athlete who are
sprinters enhances subsequent endurance performances because
of the oxygen rich air at sea level. However, going to higher
altitude to compete would have the same effects though. For
example, someone who will be competing in an altitude
significantly higher than that of where they live would be to
train by sleeping in a nitrogen tent, or using a nitrogen mask to
simulate the thinner air at the higher altitude.
Discuss the health risks associated with acute exposure to high
altitude and how can these risks be minimized?
High-altitude illnesses encompass the pulmonary and cerebral
syndromes that occur in non-acclimatized individuals after rapid
ascent to high altitude. The most common syndrome is acute
mountain sickness (AMS) which usually begins within a few
hours of ascent and typically consists of headache variably
6. accompanied by loss of appetite, nausea, vomiting, disturbed
sleep, fatigue, and dizziness (Taylor 2011). Acetazolamide can
reduce the risk of developing AMS; for example, one of the
recommendation to reduce and or mitigate the risk is to wear a
nitrogen mask when doing normal activities and to also sleep in
a nitrogen tent to help acclimatize self before ever getting there.
There is always period for the adjustment when arriving but
doing these few things will help shorten the acclimatization
period.
What alterations occur in strength, power, and muscular
endurance with physical detraining?
The changes in strength, power and muscular endurance would
depend on the individual’s level of training, physical condition
during the exercise and the duration of training. Normally the
alterations would not occur within the first few weeks and it is
also noted that the gains can be maintained by doing a workout
once every 10-14 days which will determine the physical
condition “wellbeing” of the person training (Brodison 2009).
Discussing from a personal experience, these workout plans
really help to gain what we have lost and if done properly, one
can be back to where they were when they stopped in half the
time it took them to get there the first time.
What similarities do we see between spaceflight and detraining?
Why does the body make these adaptations during spaceflight?
Detraining is defined as a partial or complete loss of training-
induced adaptations in response to either the cessation of
training or a substantial decrement in the training load and as
result of either inactivity, many of the gains achieved during
regular training are quickly lost, especially with the
cardiovascular endurance. Spaceflight is basically flying of
spacecraft into or in outer space. Space flight's detrimental
effects on muscle structure, metabolism and function decrease
the work capacity of the muscle, cardiac atrophy can also occurs
during short of prolonged spaceflights. One of the similarity
that can be discussed is how the heart reacted to both
spaceflight and detraining. In both instances, however very
7. different time tables, the heart walls were decreased in
thickness due to the lack of the load being placed on the heart.
In space the heart does not have to work as hard due to the lack
of gravity. From other hand, when someone detrains the heart
gets to stop working as hard as it has been in the past and
therefore becomes thinner than before (Perhonen 2000).
_____________________________________________________
_______________
References:
Robbie Gonzalez (2014). How do our bodies adjust to extreme
temperatures? Retrieved on January 7 2018 from
https://io9.gizmodo.com/how-do-our-bodies-adjust-to-extreme-
temperatures-1503474690
Baker, A. & Hopkins, W.G. (1998). Altitude training for sea-
level competition In: Sportscience Training & Technology.
Internet Society for Sport Science. Retrieved on January 8 2018
from http://sportsci.org/traintech/altitude/wgh.html
Andrew T. Taylor (2011). Rambam Maimonides Med J. 2011
Jan; 2(1): e0022. Published online 2011 Jan
31. doi: 10.5041/RMMJ.10022. Retrieved on January 7 2018
from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3678789/citedb
y/
Brodison, Shaun (2009). "Detraining and the Body." . N.p.
RetrievedJanuary 7 2018 from
http://ezinearticles.com/?Detraining-and-the Body&id=3490963
Perhonen, Merja A., et al (2000). "American Physiological
Society Journal of Applied Physiology." Cardiac Atrophy after
Bed Rest and Spaceflight. N.p. Retrieved on January 7 2018
from https://www.ncbi.nlm.nih.gov/pubmed/11457776
INVESTMENT PROPOSAL
8. 4
Investment Proposal
Student Name
University
Introduction
Dr. Pepper Snapple Group, Inc. is soft drink Company based in
the United States, and it focuses on the production, marketing,
and supply of soft drinks. The company’s beverage products are
categorized in two, the non-carbonated soft drinks and the
carbonated beverages that are flavored. The company operates
in three segments for it to be able to meet its customers’
demands. The departments are Soft drink Concentrates,
Packaging department, and the Latin American soft drinks. The
first segment, the beverage concentrates is accountable for
production and sale of the carbonated beverages among other
branded syrups and concentrates. The second section which is
the packaging segment is responsible for production and
distribution of the packaged soft drinks among other products
through the direct delivery system to the retail outlets. The third
portion focuses on producing and supplying syrups,
concentrates and finished soft drink products. Dr. Pepper
Snapple Group, Inc. holds a market share of 14.7% positioning
it in the third place after Pepsi-Cola which has 35.3% of its
market share (Hill, 2012). Dr. Pepper Snapple Group, Inc. has
defined its briefcase efficiently through concentrating on their
sales and marketing resources. The company’s marketing
strategy will enable the organization to focus on the various
market analyses which will allow the company to identify the
impact the critical brands produced and how they could improve
them to gain a more significant market share (Hoskisson, 2012).
9. Through the information gathered from the market, analysis
sources show that the company expense will not be affected
because the products that the targeted population need are not
new products in the market. Also through the third-party
distribution plan and the increase of the in-store activity
contributes significantly to minimizing the cost of the
advertisement.
The Break-Even Point
The break-even point is calculated by comparing the amount of
units that have to be sold in order to cover for the fixed and
variable costs. In the case of Dr. Pepper Snapple Group, Inc, the
break-even point analysis will be based on the number of units
that the company has to sell in order to cover for all expenses.
Break-even point in units= Fixed Costs/(Sales price per unit-
variable cost per unit)
=$100,000/$75-$67
=$100,000/$8
=12,500 units
Internal Rate of Return
The internal rate of return (IRR) will be used to assess the
profitability of the project undertaken by Dr. Pepper Snapple
Group, Inc.
With a break-even point in units of 12,500, and a calculated
volume of 12,500, the company can reach its break-even point
within one period.
(NPV) 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . .
10. . +Pn/(1+IRR)n
0=937,500+937,500(1+IRR)
0=937,500+937,500+937,500IRR
0=1,875,000+937,500IRR
937,500IRR=-1,875,000
IRR=-2%
Net Present Value
NPV=-937,500+(75*12,500) (1-2%)
=937,500+937,500(1-0.02)
=937,500+918750
=1,856,250
Conclusion
The marketing and distribution strategies allow the company to
perform tests, observations, and analyses thus enabling it to be
in a position to come up with a valid marketing plan for its
products and the ability to venture into new markets. The
company has been able to survive the competitive market of soft
drinks due to its effort of investing in promotion and
advertising. Also creating it awareness with its consumers
through the collaboration with the third-party distribution and
focusing on the ethnic population in America will enable the
company to increase its market share in the soft drink industry.
References
Hill, M. E. (2012). Marketing Strategy: The Thinking Involved.
11. London: SAGE.
Hoskisson, R. E. (2012). Strategic Management Cases:
Competitiveness and Globalization.
CVPSales price per unit$75.00*Variable Cost per
unit$67.00*Fixed Cost$100,000.00*Targeted Net
Income$0.00*(assume 0 if you want to calculate
breakeven)Calculated Volume12,500calculated* inputted by
userBreak-Even Point=$100,000/$75-$67=$100,000/$8=12,500
unitsInternal Rate of
Return0=937,500+937,500(1+IRR)0=937,500+937,500+937,500
IRR0=1,875,000+937,500IRR937,500IRR=-1,875,000IRR=-
2%Net Present ValueNPV=-937,500+(75*12,500) (1-
2%)=937,500+937,500(1-0.02)=937,500+918750=1,856,250
INVESTMENT PROPOSAL
4
Investment Proposal
Student Name
University
Introduction
Dr. Pepper Snapple Group, Inc. is soft drink Company based in
the United States, and it focuses on the production, marketing,
and supply of soft drinks. The company’s beverage products are
categorized in two, the non-carbonated soft drinks and the
carbonated beverages that are flavored. The company operates
in three segments for it to be able to meet its customers’
demands. The departments are Soft drink Concentrates,
Packaging department, and the Latin American soft drinks. The
12. first segment, the beverage concentrates is accountable for
production and sale of the carbonated beverages among other
branded syrups and concentrates. The second section which is
the packaging segment is responsible for production and
distribution of the packaged soft drinks among other products
through the direct delivery system to the retail outlets. The third
portion focuses on producing and supplying syrups,
concentrates and finished soft drink products. Dr. Pepper
Snapple Group, Inc. holds a market share of 14.7% positioning
it in the third place after Pepsi-Cola which has 35.3% of its
market share (Hill, 2012). Dr. Pepper Snapple Group, Inc. has
defined its briefcase efficiently through concentrating on their
sales and marketing resources. The company’s marketing
strategy will enable the organization to focus on the various
market analyses which will allow the company to identify the
impact the critical brands produced and how they could improve
them to gain a more significant market share (Hoskisson, 2012).
Through the information gathered from the market, analysis
sources show that the company expense will not be affected
because the products that the targeted population need are not
new products in the market. Also through the third-party
distribution plan and the increase of the in-store activity
contributes significantly to minimizing the cost of the
advertisement.
The Break-Even Point
The break-even point is calculated by comparing the amount of
units that have to be sold in order to cover for the fixed and
variable costs. In the case of Dr. Pepper Snapple Group, Inc, the
break-even point analysis will be based on the number of units
that the company has to sell in order to cover for all expenses.
Break-even point in units= Fixed Costs/(Sales price per unit-
13. variable cost per unit)
=$100,000/$75-$67
=$100,000/$8
=12,500 units
Internal Rate of Return
The internal rate of return (IRR) will be used to assess the
profitability of the project undertaken by Dr. Pepper Snapple
Group, Inc.
With a break-even point in units of 12,500, and a calculated
volume of 12,500, the company can reach its break-even point
within one period.
(NPV) 0 = P0 + P1/(1+IRR) + P2/(1+IRR)2 + P3/(1+IRR)3 + . .
. +Pn/(1+IRR)n
0=937,500+937,500(1+IRR)
0=937,500+937,500+937,500IRR
0=1,875,000+937,500IRR
937,500IRR=-1,875,000
IRR=-2%
Net Present Value
NPV=-937,500+(75*12,500) (1-2%)
=937,500+937,500(1-0.02)
14. =937,500+918750
=1,856,250
Conclusion
The marketing and distribution strategies allow the company to
perform tests, observations, and analyses thus enabling it to be
in a position to come up with a valid marketing plan for its
products and the ability to venture into new markets. The
company has been able to survive the competitive market of soft
drinks due to its effort of investing in promotion and
advertising. Also creating it awareness with its consumers
through the collaboration with the third-party distribution and
focusing on the ethnic population in America will enable the
company to increase its market share in the soft drink industry.
References
Hill, M. E. (2012). Marketing Strategy: The Thinking Involved.
London: SAGE.
Hoskisson, R. E. (2012). Strategic Management Cases:
Competitiveness and Globalization.
MS6010 Course Project Guidelines
Your course project will consist of a 15–20-slide Microsoft
PowerPoint presentation. These slides will help you present
your investment idea to the President and CEO of the public
company. As such, the slides must be well crafted to help
convince the leader of the company of the need for the
investment, the possible risks, and potential returns. Remember,
the slides should outline the key points to be made and not
overwhelm the viewer with too many details. You will provide
the details in the speaker notes for each slide. The slide
presentation must include:
15. 1. Cover page listing the company, project, date, and presenter.
2. Sufficient background so that a potential investor understands
the business.
3. The investment idea and summary justification.
4. Enough historic data from the worksheet you develop in
Modules 3 and 4 to give an investor an understanding of
revenues, costs, expenses, cash flows, and potential returns in
dollars and using capital budgeting analysis concepts to
demonstrate viability.
5. The break-even of the project.
6. Your final analysis summary that details why the company
should invest the money in this project.
7. Speaker notes in your Microsoft PowerPoint presentation to
include background information that you would communicate
verbally in a presentation. This speaker notes content should be
the length necessary to explain the outline presented in the
slides. Each slide must have the requisite speaker notes to
explain the material/data presented in the slides as if you are
making a formal presentation and expect to verbalize those
words.
This slide presentation is due before the end of class on Day 5
of Module 5 and is worth 25% of your course final grade or 250
points. Combined with the other submitted elements of the
project, the total points allocated to this course project will be
500 points or 50% of your grade. The grading of this project
will be extensive to match the percentage of course grade. Make
sure you provide substantial work in the creating of this project.
Breakdown of Course Project Work
16. Module
Major Task
Points
1
Select public company and begin planning project.
2
Seek approval of the company, project investment idea, and
justification by completing the Project Approval Input in the
link provided.
30
3
Begin working on the Excel worksheet provided with the project
to outline the revenues, costs, expenses, and resulting cash
flows.
4
Submit the final Excel worksheet showing all data and
calculations.
5
Submit Microsoft PowerPoint presentation complete with
speaker notes before the end of class Day 4.
470
Grading Criteria
Assignment Components
Proficient
Max Points
By end of Module 2, complete the Project Approval Input and
answer the questions provided.
Selects US public company and provides name and stock
symbol. Explains interest in the company and in the investment
project.
30
17. Excel Worksheet Requirements:
Identify the various revenues, expenses, costs, expenses, and
cash flows. If a manufacturing company and investment deals
with projects, the analysis breaks down costs into fixed and
variable, direct and indirect.
All costs, revenues, expenses, and cash flows required to
implement the project are identified, listed, and summed
appropriately
180
Calculate the CVP or break-even point for the project.
Calculations are complete and accurate.
15
Calculate NPV and IRR. Provides the numeric viability of the
project investment.
Calculations are complete and accurate.
25
Slide Presentation Requirements:
Includes a minimum of 15 slides
Each slide is formatted consistently with proper spelling and
grammar.
30
Cover page
Cover page listing the company, project, date, and presenter
10
Company summary
Sufficient written background so that a potential investor
understands the business.
40
Data from Excel Worksheet
Enough historic data from the graded worksheet to give an
investor an understanding of revenues, costs, expenses, cash
flows, and potential returns in dollars and using capital
18. budgeting analysis concepts to demonstrate viability.
30
Analysis slides
Present the breakeven and other types of analysis for the
project.
50
Final recommendations
Provide your final analysis summary that details why the
company should invest the money in this project.
40
Speaker notes on each slide
Speaker notes in your PowerPoint presentation to include
background information that you would communicate verbally
in a presentation. This background information should be the
length necessary to explain the outline presented in the slides.
Each slide must have the requisite speaker notes to explain the
material/data presented in the slides as if you are making a
formal presentation and expect to verbalize those words.
50
Total:
500
Breakeven AnalysisBreakeven AnalysisEnter your company
name hereCost DescriptionFixed Costs ($)Variable Costs
(%)Mixed CostsVariable CostsThese costs go in both the fixed
and variable columns. Use dollars in fixed and a percentage in
variable.Cost of Goods Sold45.0%Inventory0.0%Raw
Materials0.0%Direct Labor (Includes Payroll Taxes)0.0%Fixed
CostsSalaries (includes payroll taxes)$ 2,000Supplies$
19. 1,000Repairs & maintenance$ 3,000Advertising$ 250Car,
delivery and travel$ 750Accounting and legal$ 250Rent$
3,0001.0%Telephone$ 500Utilities$ 600Insurance$
800Taxes (Real estate, etc.)$ -Interest$ -Depreciation$ -
Other (specify)$ -Other (specify)$ -Miscellaneous expenses$
-Principal portion of debt payment$ -Owner's draw$
2,000Total Fixed Costs$ 14,150Total Variable
Costs46.0%Enter your sales units100Breakeven Sales level
=26204Breakeven Sales in Units262Some of the material has
been sourced from: http://www.score.org/downloads/Break-
Even%20Analysis1.xls
Total will be calculated automatically.
Total will be calculated automatically.
Fixed costs are only those costs that stay the same even when
unit sales changes. Not all of these items in this list will be
fixed for your particular case. Each one needs to be evaluated.
Variable costs are only those costs that change in equilevant
terms when sales units change. Not all of these items in this list
will be fixed for your particular case. Each one needs to be
evaluated. If you use CGS, you will not use the other three.
Change titles if needed. Enter the percent of sales.
These costs are a combination of both variable and mixed. For
example your cell phone bill has a monthly rent that never
changes and a price per minute for usage.
Cost Volume Profit (CVP) analysis allows you to determine
how changes in costs, changes in the units(volume), changes in
sales or sales units, or changes in variable cost effect the
overall profit of the company. Using this model you can adjust
these items and see the result on breakeven.
Breakeven AnalysisBreakeven AnalysisYou can use this
template or the one I provided in the discussion area for your
projectEnter your company name hereCost DescriptionFixed
Costs ($)Variable Costs (%)Variable CostsCost of Goods
Sold0.0%Inventory0.0%Raw Materials0.0%Direct Labor
(Includes Payroll Taxes)0.0%Fixed CostsSalaries (includes
20. payroll taxes)$ -Supplies$ -Repairs & maintenance$ -
Advertising$ -Car, delivery and travel$ -Accounting and
legal$ -Rent$ -Telephone$ -Utilities$ -Insurance$ -Taxes
(Real estate, etc.)$ -Interest$ -Depreciation$ -Other
(specify)$ -Other (specify)$ -Miscellaneous expenses$ -
Principal portion of debt payment$ -Owner's draw$ -Total
Fixed Costs$ -Total Variable Costs0.0Breakeven Sales level
=0Source: http://www.score.org/downloads/Break-
Even%20Analysis1.xls
Total will be calculated automatically.
Total will be calculated automatically.
Breakeven Sales Level =
Total Fixed Expenses/ ((100-Total Variable Exp%)/100)
Instructions
Note: You may want to print this information to use as
reference later. To delete these instructions, click the border of
this text box and then press the DELETE key.
Using figures from your Profit and Loss Projection, enter
expected annual fixed and variable costs.
Fixed costs are those that remain the same regardless of your
sales volume. They are expressed in dollars. Rent, insurance
and real estate taxes, for example, are usually fixed.
Variable costs are those which change as your volume of
business changes. They are expressed as a percent of sales.
Inventory, raw materials and direct production labor, for
example, are usually variable costs.
Under the variable expenses column, use whole numbers as a
percentage, not decimal numbers. For example, use 45%, rather
than .45%.
For your business, each category of expense may either be fixed
21. or variable, but not both.
Suggestions
Note: You may want to print this information to use as
reference later. To delete these instructions, click the border of
this text box and then press the DELETE key.
The categories of expense shown above are just suggestions.
Change the labels to reflect your own accounting systems and
type of business. Breakeven is a "big picture" kind of tool; we
recommend that you combine expense categories to stay within
the 22 lines that this template allows.
One of the best uses of breakeven analysis is to play with
various scenarios. For instance, if you add another person to the
payroll, how many extra sales dollars will be needed to recover
the extra salary expense? If you borrow, how much will be
needed to cover the increased principal and interest payments?
Many owners, especially retailers, like to calculate a daily
breakdown. This gives everyone a target to shoot at for the day.
Project Capital Budget and BERecommended Capital Budgeting
Template Used in MS6010 Course Project. You can use another
template if desired.Enter a complete set of financial statements
for your company in the other tab.For this tab, complete only
the yellow boxes; everything else is done by formula. I have
added several rows below template for you to complete payback
calculations, if desired.Use this template to provide the capital
budgeting information on your course project. Change titles to
work with your project as needed.Some items will not apply to
your project and can be left blank. Template assumes equipment
purchase. If you have purchases other than equipmentyou will
need to adjust the depreciation rates to achieve correct
depreciationPart 1. Key Input Data: For this project you get to
make up reasonable numbers for the project idea you will
recommend for the company you chooseInitial Investment
DollarsEnter a reasonable price of recommended initial
investment$ Increase in current assetsHow much will your
22. current assets increase as a result of this project$ Increase in
current liabilitiesHow much will your current liabilities increase
as a result of this projectUsing some of the data from the left,
what is the break even in units?Unit salesWhat are you unit
sales each yearEnter in your formula here so that the correct
B/E units are shown.$ Sales price per unitHow much will you
sell each item for?What is the B/E in dollars?% Variable cost
per unitWhat is the variable cost per each item sold as a
percentage?$ Variable cost per unit$ - 0$ Fixed costsWhat are
the fixed costs for this project?Market value$ of equipment in
Y5Enter in a reasonable market value in dollars at end of
projectTax rate PercentageUse the precentage as
specifiedWACC or Discount PercentageUse the precentage as
specifiedPart 2. Depreciation Schedule if applicable. If you
have equipment, there is always
depreciationYearsAccum'dYearInitial Cost12345Deprn%
Equipment Deprn Rate0%0%0%0%0%Enter in Depreciation %-
straight lineEquipment Deprn, Dollars$0$0$0$0$0$0Ending Bk
Val: Cost - Accum'd Deprn$0Part 3. Net Salvage
ValuesEquipmentEstimated Market Value in Year 5$0Book
Value in Y50Expected Gain or Loss0Taxes paid on gain at tax
rate percentage0Net cash flow from salvage$0Part 4. Projected
Net Cash Flows (Time line of annual cash flows)Years, 1-4
basis012345Years, actual year
basis20xx20xx20xx20xx20xx20xxInvestment Outlays at Time
Zero:Equipment0Increase in Net Operating WC0Operating Cash
Flows over the Project's Life:Units sold00000Sales
price$0.00$0.00$0.00$0.00$0.00Sales
revenue$0$0$0$0$0Variable costs00000Fixed operating
costs00000Depreciation (equipment)00000Oper. income before
taxes (EBIT)00000Taxes on operating income00000Net
Operating Profit After Taxes (NOPAT)00000Add back
depreciation00000Operating cash flow$0$0$0$0$0Terminal
Year Cash Flows:Return of net operating working capital0After-
tax salvage value0Total termination cash flows$0Net Cash Flow
(Time line of cash flows)$0$0$0$0$0$0Part 5. Key Output:
23. Appraisal of the Proposed ProjectNet Present ValueCreate a
formula using the NPV function as specifiedIRRCreate a
formula using the IRR function as specifiedMIRRBonus: Create
a formula using the MIRR function as specifiedPaybackBonus:
How would you calculate payback using Excel?Enter in any
company information to explain project as required by
instructions. How will this project help your company's bottom
line?
Doug Letsch:
Enter your initial cost of equipment here
Doug Letsch:
Hit the ? Or help key in the upper right corner of Excel to see
how to use NPV function =NPV()
Doug Letsch:
Hit the ? Or help key in the upper right corner of Excel to see
how to use IRR function =IRR()
Doug Letsch:
Hit the ? Or help key in the upper right corner of Excel to see
how to use MIRR function =MIRR()
Explain Payback here: make calculations below
Copy of Company Fin StatementsPlease copy and paste a copy
of your public company's financial statements for the last 3
years.Include a Balance Sheet, Income Statement, and Statement
of Cash flow